Exhibit 99.1
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Peadar Mac Canna
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Citibank Ireland Financial
Services plc
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Vice President
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1 North Wall Quay
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Trade Business
Management
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Dublin 1, Ireland
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Tel+353 (1) 622 4567
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Fax+353 (1) 622 2741
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peadar.maccanna@citigroup.com
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2 August
2005
John Modin
Executive Vice President
PXRE Reinsurance Ltd
110 Pitts Bay Road
Pembroke HM 08
Bermuda
Dear
John:
Committed
letter of credit facility
Further to
recent discussions, Citibank Ireland Financial Services plc (the
“Bank”) is pleased to confirm its committed letter of
credit issuance facility (the “Facility”) subject to
the terms and conditions set out in this letter (the
“Letter”).
Amount
The Facility
shall be in a maximum aggregate amount of US$200,000,000 (the
“Facility Limit”).
Facility
Documents
The Company
shall enter into the following documents in relation to the
Facility:
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(a)
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Insurance Letters of Credit
– Master Agreement (Form 3/CIFS) (the “Master
Agreement”);
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(b)
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Pledge
Agreement (the “Pledge Agreement”);
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(c)
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Custodial Undertaking Account
Control Agreement (the “Account Control
Agreement”);
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(d)
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Resolutions by
the Board of Directors of the Company authorizing the entering into
the Facility Documents (the “Resolutions”) certified by
a secretary of the Company; and
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(e)
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General Communications
Indemnity (the “General Communications
Indemnity”).
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The Master
Agreement will set forth the method of establishing letters of
credit under the Facility. In the event of any inconsistency
between the terms of this Letter and the terms of any Facility
Document, the terms of this Letter shall prevail.
Citibank Ireland Financial
Services plc 1 North Wall Quay, Dublin 1,
Ireland Tel +353 1 622 2000 Fax +353 1 622 6261
Subsidiary of Citibank, N.A.
Directors: Aidan M Brady, Maurice F Doyle, Mark Fitzgerald, Andrew
Géczy (U.S.A.), Adrian Gray (U.K.),
Brian Hayes, John Keffer (U.S.A.), Frank McCabe, Daniel Nagy
(U.S.A.)
Registered in Ireland: Registration Number 132781. Registered
Office: 1 North Wall Quay, Dublin 1.
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Conditions
precedent
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The Company shall not request
the issue of any Credit (as defined in the Master Agreement) until
the Bank has received the documents and other evidence specified
below in a form and substance reasonably satisfactory to the Bank
(each a “Condition Precedent ” ):
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(a)
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the enclosed duplicate of this
Letter, duly executed on behalf of the Company before 8 August
2005;
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(b)
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the other Facility Documents
together with any document to be delivered under the Facility
Documents, duly executed on behalf of the Company;
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(c)
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evidence that all
registrations, filings and other steps necessary (other than any
specifically referred to as conditions subsequent) to perfect any
security interest created pursuant to the Facility Documents have
been fulfilled;
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(d)
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certified copies of the
constitutional documents of the Company; and
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(e)
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such other documents and other
evidence as the Bank may reasonably require from time to
time.
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Utilisation
requests
Notwithstanding
clause 1(a) of the Master Agreement, the Bank hereby agrees to
issue during the term of the Facility upon request from the Company
a Credit, provided that the Bank shall be entitled to decline any
request to issue a Credit without liability to the Company or any
third party to whom the Company owes an obligation if:
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(a)
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such request would cause the
Bank to be in breach of any law of any jurisdiction (including
non-exclusively any breach of sanctions imposed by the law of the
United States of America); or
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(b)
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the Credit requested is in a
currency other than US dollars, GB pounds sterling, Canadian
dollars or Euros; or
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(c)
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the Company fails to deposit
in an securities account with Citibank N.A. New York
branch or such other bank or branch of the Bank as requested by the
Bank pursuant to clause 1(a)(ii) of the Master Agreement a deposit
in the amount of the Required Account Value (as defined in the
Pledge Agreement) in accordance with the terms of the Pledge
Agreement (it being understood that, unless otherwise requested by
the Bank, the Collateral required under the Pledge Agreement shall
be deposited in the Company’s account with Citibank N.A. New
York branch).
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Citibank Ireland Financial
Services plc 1 North Wall Quay, Dublin 1,
Ireland Tel +353 1 622 2000 Fax +353 1 622 6261
Subsidiary of Citibank, N.A.
Directors: Aidan M Brady, Maurice F Doyle, Mark Fitzgerald, Andrew
Géczy (U.S.A.), Adrian Gray (U.K.),
Brian Hayes, John Keffer (U.S.A.), Frank McCabe, Daniel Nagy
(U.S.A.)
Registered in Ireland: Registration Number 132781. Registered
Office: 1 North Wall Quay, Dublin 1.
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Fees
The Company
shall pay to the Bank in advance on the date of this Letter and on
each Quarter Day a letter of credit fee (the “Utilization
Fee”) in an amount equal to 0.275% (on an annualised basis)
of the Facility Limit less the principal amount of undrawn credit
on that Quarter Day. The Utilization Fee payable on the date of
this Letter shall be pro-rated for the number of days until 1 July
2005.
The Company
shall pay to the Bank on the date of this Letter and on each
Quarter Day a commitment fee (the “Commitment Fee”) in
an amount equal to 0.10% (on an annualised basis) of the principal
amount of undrawn credit on that Quarter Day.
Repayment
and expiry
The Facility
shall expire on 29 July 2008 (the “Expiry Date”),
provided that Credits that were issued prior to the Expiry Date
shall remain outstanding for the term of such Credit. The Bank and
the Company shall commence negotiations, without being under any
obligation, on the renewal of the Facility at least 60 days before
the Expiry Date.
Representations and
warranties
The Company
repeats the representations, warranties and undertakings laid out
in clauses 1(f) and (g) of the Master Agreement in favour of the
Bank in relation to this Letter as if they were more fully laid out
herein
